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  • FIRST POST
    • GibbsRule No3
    • By GibbsRule No3 3rd May 19, 9:37 AM
    • 746Posts
    • 413Thanks
    GibbsRule No3
    Bike4Work scheme
    • #1
    • 3rd May 19, 9:37 AM
    Bike4Work scheme 3rd May 19 at 9:37 AM
    My work offers this scheme and as a cyclist I thought I'd like a new bike. I will be employed by the company for the full 12 months of the scheme but in March 2020 I will get my State pension so no need to pay NI, my question is will I be able to take advantage of the scheme? I'm thinking the answer will be no but wondered if anyone knew, before my very slow HR department respond to the question. There is mention of NI but it just says you cannot partake if you fall below the National Minimum wage and thus don't pay NI. I won't fall below and will continue to pay Income Tax but not NI.

    Answering my own question, seems I can join and just two months NI would not be of benefit.
    Last edited by GibbsRule No3; 03-05-2019 at 10:39 AM. Reason: I have my answer.
    Paddle No 21
Page 1
    • CarolynRach
    • By CarolynRach 3rd May 19, 1:47 PM
    • 174 Posts
    • 367 Thanks
    CarolynRach
    • #2
    • 3rd May 19, 1:47 PM
    • #2
    • 3rd May 19, 1:47 PM
    Who is your Cycle to Work scheme through? I've never heard of Bike4Work... is it Bike2Work? If so, drop them a line and they'll be able to advise I reckon.
    • Mr_Singleton
    • By Mr_Singleton 3rd May 19, 3:23 PM
    • 1,346 Posts
    • 2,315 Thanks
    Mr_Singleton
    • #3
    • 3rd May 19, 3:23 PM
    • #3
    • 3rd May 19, 3:23 PM
    This govt. cycle scheme comes up on this forum every now and again. I’d like to put my personal tuppence worth in by saying it’s a complete con.... others might disagree with me.

    All I would suggest you do is look into the scheme very closely and know what your getting into as lots of people are only too happy to give you the benefits but are somewhat quiet about the downsides.
    • KeithP
    • By KeithP 3rd May 19, 4:20 PM
    • 15,268 Posts
    • 17,785 Thanks
    KeithP
    • #4
    • 3rd May 19, 4:20 PM
    • #4
    • 3rd May 19, 4:20 PM
    ...are somewhat quiet about the downsides.
    Originally posted by Mr_Singleton
    You seem to be too.

    Are you not going to explain to the OP all your perceived 'downsides'?
    .
    • sheslookinhot
    • By sheslookinhot 3rd May 19, 9:11 PM
    • 1,198 Posts
    • 798 Thanks
    sheslookinhot
    • #5
    • 3rd May 19, 9:11 PM
    • #5
    • 3rd May 19, 9:11 PM
    Got a certificate for £800 last May. 40% tax payer, paid after tax 38.60 per month and a final payment to "own it later" of £56. Total £520. Got a GT Avalanche Expert £799.99.

    So I'm happy with that. No downside
    Mortgage Free
    Planning for Retirement
    • GibbsRule No3.
    • By GibbsRule No3. 4th May 19, 6:29 AM
    • 25 Posts
    • 19 Thanks
    GibbsRule No3.
    • #6
    • 4th May 19, 6:29 AM
    • #6
    • 4th May 19, 6:29 AM
    I have used the scheme before, not the last bike two years ago but the one before that. No problem with it. Weird bit was the part that mentioned a last payment ďto buy the bikeĒ, nothing ever happened, a few of us taking part queried what we needed to do, especially if we wanted to get rid of the bike ( as I did because I was buying a new one and needed the room) no one in HR seemed to know what the final payments to buy or take the bike back was! Going to look at a Gazelle Orange 7. They sent the certificate through really quickly after saying I could become a member, despite no need to pay NI after March 2020.
    Paddle No 21
    • Mr_Singleton
    • By Mr_Singleton 4th May 19, 1:06 PM
    • 1,346 Posts
    • 2,315 Thanks
    Mr_Singleton
    • #7
    • 4th May 19, 1:06 PM
    • #7
    • 4th May 19, 1:06 PM
    Got a certificate for £800 last May. 40% tax payer, paid after tax 38.60 per month and a final payment to "own it later" of £56. Total £520. Got a GT Avalanche Expert £799.99.

    So I'm happy with that. No downside
    Originally posted by sheslookinhot
    Not so sure that HMRC would be so happy with that.
    • molerat
    • By molerat 4th May 19, 2:35 PM
    • 20,755 Posts
    • 15,022 Thanks
    molerat
    • #8
    • 4th May 19, 2:35 PM
    • #8
    • 4th May 19, 2:35 PM
    Not so sure that HMRC would be so happy with that.
    Originally posted by Mr_Singleton
    Why is that ?

    All seems perfectly within the rules to me.
    £800 - 42% = £464 / 12 = £38.66. 7% of £800 = £56.
    Last edited by molerat; 04-05-2019 at 2:40 PM.
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • Mr_Singleton
    • By Mr_Singleton 4th May 19, 6:25 PM
    • 1,346 Posts
    • 2,315 Thanks
    Mr_Singleton
    • #9
    • 4th May 19, 6:25 PM
    • #9
    • 4th May 19, 6:25 PM
    All seems perfectly within the rules to me. 7% of £800 = £56.
    Originally posted by molerat
    Ok Iím up for a Saturday night giggle.....

    Using your methodology....
    It sounds perfectly OK to me for my company to buy me a £100,000 company car on Tuesday. Then on Wednesday Iím going to buy the company car off my company for the scrapage value of the car in 12 years time say £1500. What do you think HMRC will say about it?

    Your claim the bike is worth 7% is fair enough in 4 years but youíve only had it for 1 year SO itís value according to HMRC is 25%. So, 25% of £800 = £200 NOT £56.

    The total savings youíve made are around £130.... whoopy ding ding.

    Says allot about the scheme that you have to defraud HMRC and the taxpayer to make any reasonable savings.
    • Mr_Singleton
    • By Mr_Singleton 4th May 19, 6:37 PM
    • 1,346 Posts
    • 2,315 Thanks
    Mr_Singleton
    You seem to be too.

    Are you not going to explain to the OP all your perceived 'downsides'?
    Originally posted by KeithP
    There was a person here a while ago who’d used the scheme but left the company after 6 months. She was mortified after they deducted a huge amount out of her final pay to pay off the bike at post Tax rate.

    It’ll affect your pension from the moment you claim till the day you die.

    If the company goes bust you technically lose the bike as it’s a company asset.

    If you buy any safety gear ie helmet, lights etc you’ll be required to pay an extra 20% VAT on them.

    The scheme will only allow you to buy full priced bikes so no discounts.... it’s why Halfords, Evans etc love it!

    You don’t own the bike until you pay fair value for it at the time of ownership transfer.

    It’s basically a rubbish scheme to flog full priced bikes to people with poor credit ratings.
    Last edited by Mr_Singleton; 05-05-2019 at 7:41 AM.
    • parking_question_chap
    • By parking_question_chap 4th May 19, 8:30 PM
    • 2,223 Posts
    • 2,466 Thanks
    parking_question_chap
    You will get much better value on the second hand market. I speak from experience.
    • sheslookinhot
    • By sheslookinhot 5th May 19, 9:40 AM
    • 1,198 Posts
    • 798 Thanks
    sheslookinhot
    Ok Iím up for a Saturday night giggle.....

    Using your methodology....
    It sounds perfectly OK to me for my company to buy me a £100,000 company car on Tuesday. Then on Wednesday Iím going to buy the company car off my company for the scrapage value of the car in 12 years time say £1500. What do you think HMRC will say about it?

    Your claim the bike is worth 7% is fair enough in 4 years but youíve only had it for 1 year SO itís value according to HMRC is 25%. So, 25% of £800 = £200 NOT £56.

    The total savings youíve made are around £130.... whoopy ding ding.

    Says allot about the scheme that you have to defraud HMRC and the taxpayer to make any reasonable savings.
    Originally posted by Mr_Singleton
    You seem to have had a bad experience at some point. You have a real downer on this scheme.
    For you information the scheme is governed by the rules of HMRC.

    Only thing you have right is the bike value after 1 year is £200, if you wish to own it now. You did not read my post carefully enough. The £56 I paid was to own it later (3 years).
    The bike I chose, was the same price from 3 retailers, none were of those you mention.

    So, saving is £280, not around £130. HMRC are not being defrauded, it's their rules.

    What's a £100,00 car got to do with it.
    Incidentally, my credit rating is 999, it cannot be higher.

    I would give up if I was you, everything you have stated is generally incorrect.
    Mortgage Free
    Planning for Retirement
    • Nasqueron
    • By Nasqueron 5th May 19, 11:57 AM
    • 7,581 Posts
    • 4,790 Thanks
    Nasqueron
    Cycle to work is not a con in any sense of the word. It's a simple and easy to use scheme that allows you to save money on a bike by using a tax allowance - usually 1/3 to 1/4 of the retail price. If you use the £1000 price as an example

    £1000 certificate. Saves £200 income tax and £120 NI = £320 saving. Take off the £70 ownership fee = 25% saving. No ifs no buts.

    The £100,000 car example is nonsense or a disingenuous attempt to make an incorrect point - it's like your firm paying it and then you pay back £100,000 /12 each month and reduce your earnings by that much each month so you save tax. Obviously that would never happen as cycle to work is a scheme intending to encourage fitness and reducing pollution by not using a car. The end of scheme sum is not applied by all firms, it depends on the scheme and how they cover the depreciation - the Evans one doesn't charge anything as their extended rental is done over 5 years so the bike is 6 years old at the end and can be handed over as £0 asset which is realistic for a bike that cost £1000, nothing like a £100k car. Cycle to work if you get the £800 certificate, you pay back £800 from your salary, the savings (as you full well know) come because the money is taken out before tax so you pay less tax/NI as your earnings are lower.

    The example of the person quitting after 6 months to put people off is laughably stupid. The bike scheme specifically tells you that if you leave work before the 12 months is up then you have to pay off the rest of the loan without the tax savings, it's a "shock" if you sign up for stuff without reading the Ts & Cs but that doesn't make the scheme bad, it's just more fool you. Someone who got a season ticket loan for a job and then left is hardly going to be "mortified" to be expected to pay back the loan out of their final pay packet - it's a loan, not a gift!

    I note too you have brought in your predictable lies / scare stories about the bikes - you can get bikes on discount on the scheme, it's entirely up to the seller. Paul's Cycles for example sells old model bikes at a discount and allows cycle scheme vouchers. When I got my last one from Evans they were doing a charity trade in option, I got £100 of accessories free and the £1000 for giving them an old MTB I had that was about £250 new 8 or 9 years before but they accept pretty much anything. The notion the bike isn't "yours" is laughable too, you could apply that to car PCP deals or even a mortgage - technically you don't own your home until the mortgage is paid off, does that mean you don't take one out? Please. As for your pension, what has that got to do with anything? I have 2 bikes done on C2W, my NI contributions for those years are full according to HMRC and while I guess it might mean for 1 year your monthly pension contributions are a bit lower (not sure if they're based on your pre-tax sum or not) but you can always put your savings into the pension anyway.

    Buying a second hand bike is fraught with issues - the bike could be stolen (if sold via personal ads) or it could have been trashed (say a crashed bike) and there is no come back if the police take it off you again. There is also the need to know what to look for, how to check for wear and tear etc - such as taking a chain tool, wheel truing stand etc etc all of which could end up costing more than you saved!
    Last edited by Nasqueron; 05-05-2019 at 12:03 PM.
    • parking_question_chap
    • By parking_question_chap 5th May 19, 8:05 PM
    • 2,223 Posts
    • 2,466 Thanks
    parking_question_chap

    Buying a second hand bike is fraught with issues - the bike could be stolen (if sold via personal ads) or it could have been trashed (say a crashed bike) and there is no come back if the police take it off you again. There is also the need to know what to look for, how to check for wear and tear etc - such as taking a chain tool, wheel truing stand etc etc all of which could end up costing more than you saved!
    Originally posted by Nasqueron

    Fraught with issues? Talk about being a drama queen.

    Those issues are even more prevalent when buying a used car, and on the whole people seem to manage that. Whatsmore on a used car most of the parts cannot even be seen, whereas you can easily inspect every espect of a bikes running gear from top to bottom. Only aside I would make is carbon frames, I would not suggest buying a used carbon model.

    I have purchased a few used bikes on ebay over the years. If you have a modicum of common sense you will and up with pretty much the same bike at as little as 1/4 of the price (if you buy in the colder months), and only couple of years old.
    • Mr_Singleton
    • By Mr_Singleton 6th May 19, 5:41 AM
    • 1,346 Posts
    • 2,315 Thanks
    Mr_Singleton
    Cycle to work is not a con in any sense of the word.
    Originally posted by Nasqueron
    Weíve tussled over this in the past and nothing Iíve seen since has led me to change my mind that this scheme specifically targets people unable to save, get credit or budget for instalments. That can be seen quite adequately in dealers refusing to offer any discount or selling bikes from the sales and a value limit on the bikes offered, as the target audience has no other option. Itís exactly the same reason that payday lender despite horrific interest rates still get queues of customers.

    I bought my last bike, a 2017 S-Works Tarmac in the end of season sales, saving me £2200. I then put the £6500 balance on a cash-back credit card. After the interest free period I transferred the balance to an 18 month 0% deal so the £6500 could be invested elsewhere. Every step of the way I was either saving or making money.

    This works because I have access to copious amounts of credit and the dealer knows that if they donít offer a good deal Iím/others are going to walk away.

    Also I canít stress this enough.... you DO NOT own the bike and as Iím sure your aware the employer is fully within there legal rights to remove the bike from you after 12 months.

    Edit: There was a case where a company went bust and the Administrators removed everyoneís bikes and sold them as company assets. The ďownersĒ were offered first refusal.

    As such I stand my original assessment of the scheme.

    Oh! The benefits of this scheme just keep on coming...
    https://forums.moneysavingexpert.com/showthread.php?t=5998369
    Last edited by Mr_Singleton; 06-05-2019 at 6:46 AM.
    • GibbsRule No3.
    • By GibbsRule No3. 6th May 19, 9:08 AM
    • 25 Posts
    • 19 Thanks
    GibbsRule No3.
    Mr singlet like I said I have already done one scheme and it was fine. I could just buy the bike now but was curious when reading the T&C (so know about the ďpitfallsĒ) that I saw the part about NI and as my SP kicks in next March, already in receipt of two private pensions, did not notice a harm on them imposed by my previous partaking in a cycle scheme, I wondered if I would be eligible, when it came back that I am, I decided to use the scheme again. Why pay £800 in one go when I can spread it and gain tax back monthly? So we will see how it goes, other colleagues in the office were also discussing what happens if we are made redundant and as happened last time when someone did, the money comes out of the redundancy at source. I only have a bike as my transport, when not using public transport, so always buy new bikes. I have a very nice one taking up space in my Lockerpod that will need to be moved on so the current bike and new one can use the space.
    Paddle No 21
    • Nasqueron
    • By Nasqueron 6th May 19, 9:33 AM
    • 7,581 Posts
    • 4,790 Thanks
    Nasqueron
    Fraught with issues? Talk about being a drama queen.

    Those issues are even more prevalent when buying a used car, and on the whole people seem to manage that. Whatsmore on a used car most of the parts cannot even be seen, whereas you can easily inspect every espect of a bikes running gear from top to bottom. Only aside I would make is carbon frames, I would not suggest buying a used carbon model.

    I have purchased a few used bikes on ebay over the years. If you have a modicum of common sense you will and up with pretty much the same bike at as little as 1/4 of the price (if you buy in the colder months), and only couple of years old.
    Originally posted by parking_question_chap
    Remember, you're buying a bike for commuting, you want something reliable. The first time bike rider buying on C2W typically knows nothing at all about bikes so doesn't know what to look for or how to check how well used it is or whether it's been crashed or how it's been maintained. They may not know to look for frame holes for panniers/mudguards etc. A bike on C2W typically comes with a free service after a set period to check it's all ok which you don't get with a private sale. The bike shop will also make sure you have the right bike size, do a basic fit etc and can provide useful accessories.

    I got into cycling thanks to C2W but I knew literally nothing about bikes, not even how to change an inner tube, I could have ended up with junk buying second hand. As it is, I ended up with a Specialized Allez which was about £660 with the lights and bits I bought so I was on the 7% deposit thing. With what I know now I would never have got that one, I'd have found something either under £500 or gone for £1000 with a frame with proper commuting setup like pannier/mudguard mounts and a less aggressive frame with a better gear setup than the 2300 I got.

    Drama Queen? Please. There are 376,000 bikes stolen every year in the UK, the chances of ending up with a stolen one, particularly on sites like Gumtree or Craig's list is high enough
    Last edited by Nasqueron; 06-05-2019 at 10:12 AM.
    • Nasqueron
    • By Nasqueron 6th May 19, 9:46 AM
    • 7,581 Posts
    • 4,790 Thanks
    Nasqueron
    Weíve tussled over this in the past and nothing Iíve seen since has led me to change my mind that this scheme specifically targets people unable to save, get credit or budget for instalments.
    Originally posted by Mr_Singleton
    This does not make it a con, it's just you don't understand how it works and/or it doesn't apply to you

    That can be seen quite adequately in dealers refusing to offer any discount or selling bikes from the sales and a value limit on the bikes offered, as the target audience has no other option.
    Originally posted by Mr_Singleton
    A lie, as I already showed. Paul's Cycles is a bike discounter that allows cycle to work, as do many local bike shops and as per the example of Evans trade in. Ignoring facts that disprove your point doesn't make your argument valid. Some shops do put in an admin fee to cover their costs - I believe Paul's and Planet X do for example - you still make savings even with this as the fee is factored into the certificate value.

    Itís exactly the same reason that payday lender despite horrific interest rates still get queues of customers.
    Originally posted by Mr_Singleton
    Nothing like that, a pay day loan is a desperate person's last resort - though the horrific rates of interest is only really an issue with a roll over. If you borrow on a pay day loan and pay it back at pay day you typically only pay a few pounds of interest, the problem comes from people who borrow without a plan to pay back. The cycle scheme is an INTEREST FREE loan, where you are effectively given back 25% of the loan, so the complete opposite of a pay day loan. Do you see why I can't take your nonsense seriously?

    I bought my last bike, a 2017 S-Works Tarmac in the end of season sales, saving me £2200. I then put the £6500 balance on a cash-back credit card. After the interest free period I transferred the balance to an 18 month 0% deal so the £6500 could be invested elsewhere. Every step of the way I was either saving or making money.
    This works because I have access to copious amounts of credit and the dealer knows that if they donít offer a good deal Iím/others are going to walk away.
    Originally posted by Mr_Singleton
    Utterly irrelevant, people are not buying S-Works bikes for commuting. That's the reason the price is capped at £1000 for cost saving - it's people buying a sensible bike for commuting, not a racing bike designed for pro athletes (nobody except a pro rides a 9k RRP bike)

    Also I canít stress this enough.... you DO NOT own the bike and as Iím sure your aware the employer is fully within there legal rights to remove the bike from you after 12 months.
    Originally posted by Mr_Singleton
    A second lie. The bike is yours when your 12 months is up, once on the extended rental the bike is nothing to do with your employer and cyclescheme (the one I used) has no such option for the firm to take the bike away - you borrowed £1000 from the firm and paid it back, end of transaction, the employer has no right to the bike. Indeed, effectively it's yours from the moment you have the certificate as a used asset is worth less to the firm than the employee making the loan payments. The transfer to the rental scheme means the firm has no ownership.

    Moreover, who cares? As I said above, YOU DO NOT OWN YOUR HOUSE UNTIL THE MORTGAGE IS PAID therefore no-one will buy a house with a mortgage right? FGS this is such a false argument, if you did not pay off your credit card bill the bank would eventually come for your assets like the bike, so YOU didn't own the bike either. So I guess you didn't buy the bike after all?

    Edit: There was a case where a company went bust and the Administrators removed everyoneís bikes and sold them as company assets. The ďownersĒ were offered first refusal.
    Originally posted by Mr_Singleton
    A very rare and isolated case, people in that situation would be as worried about their next pay cheque to cover their bills, it's no different from leaving the job or being fired. I bet you couldn't find a single other example of this happening, assuming this one did.

    As such I stand my original assessment of the scheme.
    Originally posted by Mr_Singleton
    It's a con because people who want to buy a sensibly priced commuter bike can save 25% by taking out a basic loan? Hell, let's go back to your previous point about VAT on lights/helmet. If only there was a way to avoid that like buying them separately or getting them with a special deal with the shop like Evans? Oh wait there totally is - that thing I just said!

    Oh! The benefits of this scheme just keep on coming...
    https://forums.moneysavingexpert.com/showthread.php?t=5998369
    Originally posted by Mr_Singleton
    And you think that's a good example how? The person has complained and not yet had a response. The bike is out of warranty and has a part failure and they haven't even looked at whether it's a manufacturer fault or the user's fault. The part they need may be discontinued. This is the fault of cycle scheme how?

    This post is 1 day old and not even resolved. Jeebus you scrape the barrel here, you could cut out the mention of cycle scheme and nothing about that post would change, it's for the bike owner to make the complaint and see what happens. Evans have not rejected the complaint on the basis the bike was not bought by the poster, they haven't even looked at it, how exactly is that an example of cycle scheme being bad?

    According to research from the IES, up to 2016 there were 1.1 MILLION successful applications for bikes and you found 1 unique scenario which isn't even resolved!
    Last edited by Nasqueron; 06-05-2019 at 10:05 AM.
    • RichardD1970
    • By RichardD1970 6th May 19, 1:17 PM
    • 3,224 Posts
    • 4,842 Thanks
    RichardD1970
    Weíve tussled over this in the past and nothing Iíve seen since has led me to change my mind that this scheme specifically targets people unable to save, get credit or budget for instalments. That can be seen quite adequately in dealers refusing to offer any discount or selling bikes from the sales and a value limit on the bikes offered, as the target audience has no other option. Itís exactly the same reason that payday lender despite horrific interest rates still get queues of customers./URL]
    Originally posted by Mr_Singleton
    Rubbish.

    I had a bike on the scheme a couple of years ago.

    I earn a very good wage, have a very good credit history with numerous credit cards which I tart between (total credit available about £35k).

    I shopped around for the bike I wanted before applying for the scheme and using a small local dealer got the best price possible. It doesn't matter to them where the money comes from, they would rather have the business than someone else.

    Overall I saved around £300 and my pension contributions (salary sacrifice) didn't change in the slightest.

    The bike is now mine, and nothing to do with my company or the scheme.
    • parking_question_chap
    • By parking_question_chap 6th May 19, 2:51 PM
    • 2,223 Posts
    • 2,466 Thanks
    parking_question_chap


    Moreover, who cares? As I said above, YOU DO NOT OWN YOUR HOUSE UNTIL THE MORTGAGE IS PAID therefore no-one will buy a house with a mortgage right? FGS this is such a false argument, if you did not pay off your credit card bill the bank would eventually come for your assets like the bike, so YOU didn't own the bike either. So I guess you didn't buy the bike after all?

    Originally posted by Nasqueron

    Thats not correct.
    If you buy a house with a mortgage you do own the house. You simply have a loan that needs to be repaid. It doesnt mean the bank owns the house, it just means they will take ownership of it should payments stop. A slight technicality but needs to be mentioned.
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